DEF 14A of Live Oak Bancshares, Inc.
Filed Apr 2, 2026 · FY20250001462120-26-000030
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS The Board of Directors has set the number of directors of the Company at ten and recommends that shareholders vote for the nominees listed below, each for a term of one year.
PROPOSAL 1: ELECTION OF DIRECTORS
| Name and Age | Position(s) Held | Director Since (1) | Principal Occupation and Business Experience During the Past Five Years | | Tonya W. Bradford (61) | Director | 2020 | Associate Professor of Marketing at the University of California, Irvine. | | William H. Cameron (72) | Director | 2013 | President, Cameron Management, Inc., an investment management company focusing on real estate development, brokerage, and property management. | | David G. Lucht (69) | Director | 2008 (2) | Retired Executive Vice President of Credit of the Bank. | | Jeffrey W. Lunsford (60) | Director | 2025 (3) | Chief Executive Officer of Tealium, Inc., a customer data platform provider. | | James S. Mahan III (74) | Chairman and CEO | 2008 | Chairman and Chief Executive Officer of the Company and the Bank. | | Patrick T. McHenry (50) | Director | 2025 (4) | Senior Advisor with Lazard, Inc. Previously, Mr. McHenry served for twenty years across ten terms in the US House of Representatives as the Congressman for North Carolina's 10th Congressional District. | | Miltom E. Petty (74) | Director | 2010 | Former Executive Vice President of Carolina Hosiery Mills, Inc., a privately held manufacturing and real estate development company, and previously served as the Chief Financial Officer for 45 years. | | Neil L. Underwood (56) | Director | 2008 | Former President of the Company; General partner and co-founder of Canapi Ventures, a series of funds focused on providing venture capital to new and emerging financial technology companies. | | Yousef A. Valine (66) | Director | 2022 | Financial services executive with over 40 years of experience across a broad range of areas, including credit, operations, regulatory relations, governance, information technology, treasury services, mergers and acquisitions, and risk management. | | William L. Williams III (74) | Vice Chairman and EVP | 2008 | Executive Vice President and Vice Chairman of the Company and the Bank. |
PROPOSAL 1: ELECTION OF DIRECTORS
(1)The year first elected indicates the year in which each individual was first elected a director of the Company or the Bank and does not reflect any break(s) in tenure. (2)Mr. Lucht was previously a member of our Board of Directors from 2008 until 2017 and was re-appointed effective February 23, 2021. (3)Mr. Lunsford was appointed as a member of our Board of Directors effective August 12, 2025. (4)Mr. McHenry was appointed as a member of our Board of Directors effective May 21, 2025. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” EACH OF THE NOMINEES FOR DIRECTOR OF THE COMPANY FOR A TERM OF ONE YEAR.
Qualifications of Directors
Qualifications of Directors
Qualifications of Directors
| | Tonya W. Bradford. Dr. Bradford was appointed as a member of our Board of Directors in September 2020 and serves on the Risk and Compensation Committees. Dr. Bradford is a professor of marketing at the University of California, Irvine where she conducts research regarding rituals, communities and identity across phenomenon including gifting (e.g., registry, organ, charitable), relationships with money, communities (e.g., tailgating and support), acculturation, and brand loyalty. Dr. Bradford graduated with a Bachelor of Arts degree in Anthropology from Northwestern University, a Masters in Business Administration from the Kellogg School of Management, Northwestern University, and a doctoral degree in Marketing from Northwestern University. Her research is published in premier journals, including the Journal of Consumer Research, the Journal of Marketing, the Journal of the Academy of Marketing Science, the Journal of Retailing, the Journal of Business Research, the Journal of Interactive Marketing, and Research in Consumer Behavior. Dr. Bradford serves as associate editor for Journal of Retailing and Journal of Public Policy & Marketing, the Journal of the Academy of Marketing Science, Journal of Consumer Research, and the Journal of Marketing. Dr. Bradford currently serves on the board of directors of Tealium, Inc. Prior to joining the University of California, Dr. Bradford worked domestically and abroad in financial services including Charles Schwab & Company, Gemini Consulting (now Ernst & Young), and S1 Corporation. We believe Dr. Bradford’s depth of executive and academic experience, including marketing expertise, qualify her to serve on our Board of Directors. | | | William H. Cameron. Mr. Cameron has served on our Board of Directors since November 2013 and chairs the Compensation Committee and serves on the Audit Committee. Mr. Cameron has extensive prior experience as a director of a financial institution, having served as a founding director of Port City Capital Bank and as a director of Crescent Financial Corporation and Crescent State Bank following its acquisition of Port City Capital Bank in 2006. Mr. Cameron has extensive executive experience in corporate and real estate finance, real estate development, and private equity. He has been President of Cameron Management, Inc. since 2000 and has held leadership positions in a number of businesses over the last 30 years. Mr. Cameron served as Chief Operating Officer of Atlantic Telecasting Corporation, the NBC television affiliate in Wilmington, North Carolina. Mr. Cameron holds a B.S. in Business Administration and a Juris Doctor degree from the University of North Carolina at Chapel Hill. He has successfully completed the North Carolina Bank Directors’ College and has participated in numerous Advanced Bank Directors’ College programs. As an active business, civic and charitable leader, Mr. Cameron serves on the board of the Dan Cameron Family Foundation, Inc. and the New Hanover Community Endowment. He is president of the Dan Cameron Family Foundation, Inc., which has made significant contributions to the economic and cultural development of the Wilmington area. We believe Mr. Cameron’s prior experience as a director of two FDIC-insured financial institutions over a period of 16 years brings to our board critical skills related to financial oversight of complex organizations, strategic planning, and corporate governance and qualifies him to serve as one of our directors. |
Qualifications of Directors
| | David G. Lucht. Mr. Lucht was most recently appointed as a member of our Board of Directors in February 2021. Mr. Lucht serves on the Risk, Compensation, and Nominating and Corporate Governance Committees. He is a founding member of the executive management team and previously served on the Board of Directors from 2008 to 2017. He served in several roles at Live Oak Bank including as President, Chief Risk Officer, Chief Lending Officer and Chief Credit Officer. After retiring from the Board in November 2017, Mr. Lucht continued to serve in several roles with the Bank most recently as Executive Vice President of Credit until his retirement from employment in December 2020. Before joining the Bank’s predecessor in May of 2007, Mr. Lucht held executive positions with several different banking institutions, including Chief Credit Officer and Executive Vice President for First Merit Bank, Akron, Ohio, where he was responsible for leading a turnaround in credit culture and performance of the $10.5 billion bank. Prior to First Merit, Mr. Lucht served as Senior Credit Officer of National City Bank, Cleveland, Ohio. A native of Ohio, Mr. Lucht began his banking career with National City Bank in 1985 after graduating from Kent State University with his Masters in Business Administration. He obtained his undergraduate Bachelor of Science degree in Marketing at Miami University in Ohio. Mr. Lucht helped design the Bank’s approach to the identification and management of credit risk. He has helped to positively shape the corporate culture of the Company since inception, and his leadership and executive management experience, which has contributed to our success to date, qualifies him to serve as a member of our Board of Directors. | | | Jeffrey W. Lunsford. Mr. Lunsford joined as a member of our Board of Directors in August 2025. Mr. Lunsford currently serves as the Chief Executive Officer of Tealium, Inc., a leading customer data platform provider. Mr. Lunsford has more than three decades of experience as a technology and internet executive and leader. Prior to joining Tealium, Mr. Lunsford served as President, CEO, and Chairman of Limelight Networks, a global leader in digital content delivery, where he led the company through its initial public offering in 2007 and scaled its operations globally. From 2003 to 2006, Mr. Lunsford served as the CEO of WebSideStory, a SaaS-based web analytics pioneer that went public in 2004 and is now part of Adobe Systems. Earlier in his career, Mr. Lunsford served as the CEO of TogetherSoft, a software development tools company acquired by Borland Software, where he successfully integrated operations post-acquisition. In addition to his executive roles, Mr. Lunsford currently serves as Chairman of the board of directors of DefenseStorm, Inc., a cybersecurity solutions provider for financial institutions, and formerly served as chairman of the board of directors of nCino, Inc., a leading cloud banking company. A former naval aviator, he received a Bachelor of Science Degree in Information and Computer Sciences from the Georgia Institute of Technology. We believe Mr. Lunsford’s extensive executive leadership experience in the technology sector and familiarity with financial institutions qualifies him to serve on our Board of Directors. |
Qualifications of Directors
| | James S. Mahan III. Mr. Mahan is the Company’s founder, Chief Executive Officer, and Chairman of the Board of Directors. Mr. Mahan is also a managing partner and co-founder of Canapi Ventures, a series of funds focused on providing venture capital to new and emerging financial technology companies. Mr. Mahan currently serves on the board of directors for DefenseStorm, Inc., a cloud-based cybersecurity firm, and Savana Inc., a cloud-native solution that provides digital delivery of banking and customer service processes for financial institutions. Mr. Mahan is also a co-founder of nCino, Inc., a cloud-based banking software built on the Salesforce platform, Finxact, Inc., the cloud-native core-as-a-service platform, and Payrailz, Inc., a digital payment company. Prior to starting Live Oak Bank, Mr. Mahan was the Chief Executive Officer and Chairman for S1 Corporation and founder of Security First Network Bank, the world’s first Internet bank. Under his leadership, S1 Corporation grew to become a $234 million software and services provider in only six years, averaging more than 200 percent growth year over year. At its peak, S1 had a market capitalization of over $6 billion. During his term as Chief Executive Officer, Mr. Mahan was ranked as one of the 10 Most Influential Personalities in Financial Services by FutureBanker magazine. Prior to founding Security First Network Bank and S1 Corporation, Mr. Mahan launched Cardinal Bancshares, where he served as Chairman and Chief Executive Officer. Mr. Mahan built Cardinal into an institution with approximately $675 million in total assets and took the company public in 1992. Before launching Cardinal, Mr. Mahan spent several years with Citizens Union National Bank & Trust Co., serving as President, Chief Operating Officer and Vice Chairman and becoming Chairman and Chief Executive Officer in 1984. In 1986, Mr. Mahan formed an investment group that purchased Citizens Union and subsequently sold it to BankOne Corp. of Columbus, Ohio. Mr. Mahan began his career in 1973 at Wachovia Bank & Trust Co. in Winston-Salem, NC, after graduating with a bachelor’s degree in economics from Washington & Lee University in Lexington, Virginia. As the Company’s founder, Chief Executive Officer and Chairman, Mr. Mahan brings valuable perspective and experience which qualifies him to serve as a member of the Board of Directors. | | | Patrick T. McHenry. Mr. McHenry joined as a member of our Board of Directors in May 2025. Mr. McHenry currently serves as a Senior Advisor with Lazard, Inc. Previously, Mr. McHenry served for twenty years across ten terms in the US House of Representatives as the Congressman for North Carolina's 10th Congressional District. Throughout his time in Congress, Mr. McHenry was a member of the House Financial Services Committee, including serving as its lead Republican member and Chairman from 2018 to 2024. During his time leading the committee, Mr. McHenry drove a robust legislative agenda focused on cryptocurrency, capital formation, artificial intelligence, fintech, data privacy, and corporate governance issues, among other topics. In addition to guiding the House Financial Services Committee, McHenry led the House of Representatives in October 2023, serving as the first ever Speaker Pro Tempore following the ouster of former Speaker Kevin McCarthy. During that time McHenry led the institution and worked to preserve the powers of the Speakership while also helping drive House Republicans towards consensus on a new Speaker. McHenry also served as one of House Republicans’ lead negotiators in the spring of 2023 as they worked with the Biden Administration to pass the Fiscal Responsibility Act, a legislative package that achieved historic spending cuts and an increase in the debt ceiling, avoiding a catastrophic default. McHenry is a native of Gastonia, NC and a graduate of Belmont Abbey College. We believe Mr. McHenry’s depth of experience in banking and financial services qualifies him to serve on our Board of Directors. |
Qualifications of Directors
| | Miltom E. Petty. Mr. Petty has served as a member of our Board of Directors since August 2010. He serves on our Audit and Nominating and Corporate Governance Committees. In 2025, Mr. Petty retired from his role as Executive Vice President of Carolina Hosiery Mills, Inc., a privately held manufacturing and real estate development company, and previously served as the Chief Financial Officer for 45 years. Since August 2013, Mr. Petty has served as a director of Trust Company of the South. Mr. Petty graduated with a Bachelor of Science degree in Business Administration from the University of North Carolina at Chapel Hill. He has held an active CPA license from the State of North Carolina for over 50 years. We believe Mr. Petty’s experience serving as the Chief Financial Officer and Executive Vice President of Carolina Hosiery Mills, Inc., including his familiarity with accounting standards and ability to serve as our Audit Committee financial expert, brings important skills and qualifies him to serve on our Board of Directors. | | | Neil L. Underwood. Mr. Underwood is a cofounder and has served as a member of our Board of Directors since 2008. Mr. Underwood previously served as President until November 2023, and currently serves as cofounder and General Partner of Canapi Ventures, a strategic fintech venture fund. While at Live Oak, Mr. Underwood cofounded nCino Inc. (Nasdaq:NCNO), a cloud-based bank operating system now serving over 1,000 financial institutions globally. Mr. Underwood also cofounded Live Oak Ventures, Inc., a subsidiary of Live Oak Bancshares Inc., where he helped incubate companies focused on digital bank transformation, including Finxact Inc., Payrailz, LLC, DefenseStorm, Inc. and Greenlight Financial Technologies, Inc. In 2017, Mr. Underwood cofounded Apiture, Inc., a joint venture between Live Oak Bank and First Data Corporation, serving as a cloud-native omni-channel onboarding and servicing platform. Mr. Underwood currently serves on the boards of Greenlight Financial Technologies, Inc., ModernFI, Inc., Island Technology, Inc., Notarize, Inc. (Proof), Asset Class Limited, Anatomy Financial, Inc., Cascading AI, Inc. (Casca), Posh Technologies, Inc., Digital First Holdings, LLC (Candescent), and the Camp Schreiber Foundation. He previously served on the boards of nCino Inc., Apiture Inc., DefenseStorm Inc., Payrailz, LLC, Finxact, Inc. and Blend Labs, Inc. A native of Miami, Florida, he holds a Bachelor of Science in Industrial Engineering from the Georgia Institute of Technology. Mr. Underwood’s experience in the technology sector, coupled with a talented approach to management and resource utilization, makes him well suited to serve as a member of our Board of Directors. | | | Yousef A. Valine. Mr. Valine was appointed as a member of our Board of Directors in September 2022. He chairs the Audit Committee and serves on the Risk Committee and Nominating and Corporate Governance Committee. He has over 40 years of broad experience in financial services, which include 24 years at Wachovia and 13 years at First Horizon Corporation. Mr. Valine’s leadership and expertise spans all aspects of credit, market and operational risk management, regulatory relations, management and board governance, Community Reinvestment and Bank Secrecy Acts, operations, information technology, treasury services, finance and mergers, and acquisitions. He has served as Chief Operating Officer, Chief Risk Officer, and Merger Executive at First Horizon. Prior to joining First Horizon, Mr. Valine held progressively senior roles at Wachovia, including Chief Operating Officer of the Risk Management Division. We believe Mr. Valine’s depth of executive experience in banking and financial services, including risk management, qualify him to serve on our Board of Directors. |
Qualifications of Directors
| | William L. Williams III. Mr. Williams is the Vice Chairman of our Board of Directors and one of the original founders of the Bank. He currently serves as Executive Vice President of the Company and the Bank. Prior to starting at Live Oak, Mr. Williams spent 19 years in corporate banking at Wachovia Bank & Trust Co. and worked for 14 years at Vine Street Financial doing SBA lending. Mr. Williams began his banking career in 1973 at Wachovia, where he worked with Wachovia Services, Inc, then Wachovia Regional Corporate Lending, calling on and lending to mid-market regional companies. In 1987, he relocated to Wilmington, North Carolina, where he managed the Wachovia Corporate Lending group for the three-county area of Southeastern North Carolina. In 1992, he re-joined Mr. Mahan at Cardinal Bancshares as they began Vine Street Financial, a niche SBA lending division of Vine Street Trust Company. Mr. Williams held several positions within this group including President and Senior SBA lender. Through a series of mergers/acquisitions, Vine Street Financial became a division of BB&T, where Mr. Williams served as a senior SBA lender, resigning in May of 2007 to found Live Oak Bank’s predecessor. Mr. Williams currently serves on the Board of Trustees for Elon University. Mr. Williams graduated in 1973 from the University of North Carolina at Chapel Hill with a B.S. degree in Business Administration. Mr. Williams’ over 50 years of corporate banking experience, including deep experience in the SBA lending sector and his involvement as a founder and organizer of our Company, make him uniquely qualified to serve as Vice Chairman of our Board of Directors. |
Say-on-Pay Results and Responsiveness to Shareholders
Say-on-Pay Results and Responsiveness to Shareholders At our 2025 annual meeting of shareholders, 67.13% of the shares represented and entitled to vote on the matter voted to approve, on an advisory basis, the compensation of our named executive officers. This was a decrease from the 2024 support level of 76.45%. The Board and the Compensation Committee of our Board of Directors (referred to in this Compensation Discussion and Analysis as the “Committee”) considered the results of these Say-on-Pay votes in determining the compensation of our executive officers, including our named executive officers. We value the opinions of our shareholders, and maintaining an open dialogue and constructive engagement with our shareholders is a priority for the Board and the Committee. Throughout 2025, the Company conducted an expanded shareholder outreach program to solicit feedback on our executive compensation program and related governance practices. Our outreach included discussions with shareholders prior to the 2025 Annual Shareholder Meeting, as well as additional engagement following the meeting to better understand investor perspectives in light of the Say-on‑Pay results. The Company invited a number of shareholders to participate in discussions in 2025. These discussions were held with shareholders that voted both for and against our Say-on-Pay proposal in 2025. These discussions involved representatives from our executive management team, including members of our legal, finance, and investor relations functions. In every case where a shareholder made the request, the discussions also included participation from Mr. Cameron, a member of our Board who serves as Chair of the Compensation Committee. These discussions focused on executive compensation, corporate governance, and other matters raised by shareholders, including our use of time‑based RSUs and the factors considered when determining equity awards. As part of our shareholder outreach program in 2025: •we invited approximately 40% of outstanding shares as of December 31, 2025 (including more than 10 institutional investors) to engage with us; and •we engaged with approximately 30% of outstanding shares as of December 31, 2025 through 5 meetings. The shareholder feedback from these meetings was reported to the Board and the Committee throughout the year. Our goal is to be responsive to our shareholders and ensure we understand and address their concerns and observations. During the meetings held in 2025, we learned that shareholders generally encourage the Company to continue enhancing the clarity of our executive compensation disclosures, including providing additional insight into the Committee’s decision‑making process, the factors considered when determining annual equity award levels, and the overall alignment of our program with long‑term shareholder value. Shareholders also expressed interest in understanding the rationale for the Company’s current compensation structure and how the Committee evaluates compensation outcomes over time. The Board and the Committee will consider the outcome of this year’s Say-on-Pay vote (see Proposal 4 in this Proxy Statement), as well as feedback received from shareholders throughout the year, when making compensation decisions for our named executive officers for the 2026 performance year. In addition, consistent with the recommendation of the Board and the preference of our shareholders as reflected in the nonbinding shareholder advisory vote on the frequency of future Say-on-Pay votes held most recently at our 2025 annual meeting of shareholders, we conduct Say-on-Pay votes on an annual basis.
Key 2025 Compensation Highlights
Key 2025 Compensation Highlights ➢ Mr. Mahan received a base salary, perquisites, and other benefits for 2025. Mr. Mahan’s salary has not materially increased since we completed our IPO. Due to his long-standing and substantial stock ownership in the Company, the Committee believes Mr. Mahan’s interests are aligned with those of our shareholders to a substantial degree and has not awarded Mr. Mahan any equity-based awards since the IPO. ➢ All of our NEOs, other than Mr. Mahan, received a discretionary cash bonus for the 2025 performance year. See “2025 Discretionary Cash Bonus” below for more details. ➢ Messrs. Losch, Derraik, Phifer, and Moroz each received RSU awards that vest pro rata over five years. The RSUs granted to each of them in February 2026 were based on the Committee’s review of Company and individual performance during 2025. Messrs. Moroz and Phifer also received an RSU award in May 2025 and August 2025, respectively, which vests pro rata over five years. See “2025 RSU Awards” below for more details on these RSUs. ➢ Our NEOs serve at the discretion of the Board of Directors, and no NEO is party to an employment agreement.
2025 Compensation Program
2025 Compensation Program The Committee seeks to align management’s incentives with the long-term interests of our shareholders by designing incentive compensation to reward corporate performance. When approving compensation for the 2025 performance year for our NEOs, the Committee reviewed key financial measures and performance related to our strategic plan and financial results. The Committee also considered qualitative factors such as execution against strategic initiatives, operational performance, leadership contributions, and progress toward long-term growth objectives. While the Committee does not apply a rigid formula or pre-established financial targets, it exercises judgment in evaluating these factors collectively in determining appropriate compensation outcomes. The Committee also aimed to attract and retain its talented NEOs through the compensation program. In February 2026, the Committee determined to award (i) discretionary cash bonuses based on its review of individual and Company performance during 2025 and (ii) RSU awards informed by 2025 performance and expected future contributions. The Committee did not target any specific mix or percentage of compensation components and believes that the overall mix of 2025 compensation components for the NEOs, including base salary that provided fixed pay, a discretionary cash bonus that provided for cash payouts based on performance over the 2025 fiscal year, and awards of RSUs to Messrs. Losch, Derraik, Phifer, and Moroz, each of which will vest pro rata over a five-year period, appropriately motivated the NEOs and aligned their interests with the long-term interests of shareholders. Base Salaries. We aim to provide our NEOs with a base salary that is commensurate with similar financial institutions and appropriate for the overall responsibility of the individual based on experience, performance, and any other unique factors or qualifications, such as the difficulty of replacing the officer with someone of comparable experience and skill. The base salaries are intended to compensate our NEOs for the day-to-day services performed for us. When setting base salaries for our executive officers, the Committee considers the scope of the officer’s role and the officer’s ability to contribute to our success. The Committee also considers length of service, as well as other forms of compensation awarded. For executive officers other than the CEO, the Committee takes into account the CEO’s input and recommendations. After considering these factors, in February 2025 the Committee increased the 2025 base salaries from the 2024 base salaries for Messrs. Phifer and Moroz. The Committee specifically considered Mr. Phifer’s accelerated proficiency in his role as Chief Financial Officer. In addition to the February 2025 increase based on execution in his role, Mr. Moroz’s base salary was further increased in May 2025 in connection with his promotion to Chief Banking Officer. The 2024 base salaries for Messrs. Mahan, Losch, and Derraik were unchanged in 2025. 2025 Discretionary Cash Bonus. In February 2026, the Committee reviewed our performance for 2025. Based on overall Company performance, including significant banking and operational achievements, the Committee determined to award a discretionary cash bonus to each NEO other than Mr. Mahan. Each cash bonus represented approximately 10% to 13% of the NEO’s 2025 base salary received as of December 31, 2025. Equity Compensation. At various times, the Committee awards incentive compensation to our NEOs in the form of equity-based compensation in order to further align management and shareholder interests and to reward management for increases in shareholder value. The Committee also uses these awards to attract and retain its NEOs. The Committee believes that RSU awards with multi-year vesting promote long-term alignment with shareholders by encouraging sustained stock ownership and retention of key executives. Grants are not made on a pre-determined schedule but are typically made during an open trading window under our Insider Trading Policy. 2025 RSU Awards. In February 2026, the Committee reviewed both Company and individual performance during 2025. In determining the size of equity awards, the Committee considers several factors, including the executive’s role and responsibilities, individual contributions to the Company’s strategic priorities, overall Company performance, internal equity among the leadership team, and the importance of aligning executive incentives with long-term shareholder value. The Committee specifically considered the financial highlights and events under the heading “Key 2025 Business and Financial Highlights” above. The Committee determined to grant RSU awards that vest pro rata over five years for each of our NEOs other than Mr. Mahan. The Committee has not awarded Mr. Mahan any equity-based awards since the Company’s IPO. Mr. Losch received an award of 52,694 RSUs with a grant date fair value of $2,171,520. The Committee determined to grant this award in recognition of Mr. Losch’s strategic leadership amid persistent economic uncertainty, his role in sustaining financial momentum, and his leadership in accelerating the Company’s operational efficiency to support long-term growth. Mr. Phifer received an award of 9,580 RSUs with a grant date fair value of $394,792. The Committee determined to grant this award based on Mr. Phifer’s leadership in maturing the finance organization to support the Company’s strategic and operational objectives. Mr. Derraik received an award of 13,173 RSUs with a grant date fair value of $542,859. The Committee determined to grant this award based on Mr. Derraik’s strategic leadership in shaping and delivering transformational technological advancements across the Company. Mr. Moroz received an award of 8,982 RSUs with a grant date fair value of $370,148. The Committee determined to grant this award based on his leadership and execution to enhance checking initiatives and introduce merchant services as core components of the Company’s growth strategy. Additional 2025 RSU Awards. The Committee also granted RSU awards outside of the Company’s annual equity award cycle in connection with executive leadership considerations. In May 2025, Mr. Moroz received an award of 35,587 RSUs with a grant date fair value of $980,778 in connection with his promotion to Chief Banking Officer and the Committee’s desire to align his long-term incentives with his expanded leadership responsibilities. In August 2025, Mr. Phifer received an award of 14,581 RSUs with a grant date fair value of $492,109 as a retention-focused long-term incentive award. Set forth below is additional information regarding our equity compensation plans that were in effect or under which awards were outstanding in 2025.
2025 Compensation Program
2015 Omnibus Stock Incentive Plan. Our shareholders approved the 2015 Omnibus Stock Incentive Plan, as amended and restated effective May 24, 2016, at the 2016 Annual Meeting. At the 2018, 2021, and 2023 Annual Meetings, our shareholders approved amendments to the 2015 Omnibus Stock Incentive Plan to increase the number of shares issuable under the plan. We refer to the 2015 Omnibus Stock Incentive Plan, as amended and currently in effect, as the “2015 Omnibus Stock Incentive Plan.” The original 2015 Omnibus Stock Incentive Plan was approved by our shareholders at the 2015 Annual Meeting. The aggregate number of shares of our voting common stock that may be issued pursuant to the 2015 Omnibus Stock Incentive Plan is currently 13,750,000. The awards may be issued in the form of incentive stock options, non-qualified stock options, restricted stock, RSUs, or stock appreciation rights. As of December 31, 2025, there were a total of 1,897,812 shares of our voting common stock reserved for issuance pursuant to awards under the 2015 Omnibus Stock Incentive Plan. The 2015 Omnibus Stock Incentive Plan is scheduled to expire on May 24, 2026. As described in “Proposal 2: Approval of 2026 Omnibus Stock Incentive Plan,” the Board of Directors is recommending that shareholders approve a new equity-based compensation plan so that the Company may continue to utilize equity incentives as part of its compensation program. Policies on the Timing of Option Awards. Item 402(x) of Regulation S-K requires us to discuss our policies and practices on the timing of awards of options in relation to the disclosure by us of material nonpublic information. The Company does not currently grant stock options or similar awards and has not granted any such awards since 2016. Accordingly, we do not consider the release of material nonpublic information in relation to the grant of such awards and do not time such release for the purpose of affecting the value of executive compensation.
Severance Benefits
Severance Benefits We do not have employment agreements in place with any executive officer, and any severance benefits are negotiated on an individual basis. For additional information regarding severance benefits, see “Potential Payments Upon Termination or Change in Control” below.
Change in Control
Change in Control We do not have employment agreements in place with any executive officer that would provide benefits in connection with a change in control of the Company or any of its subsidiaries. Some of the outstanding equity awards to our NEOs include provisions that provide for accelerated vesting in connection with a change in control. See “Potential Payments Upon Termination or Change in Control” below for more information.
Compensation Consultant; Benchmarking
Compensation Consultant; Benchmarking In making compensation decisions for 2025, the Committee did not utilize the services of a compensation consultant, and the Committee did not obtain or perform compensation benchmarking from an external compensation consultant.
Equity Compensation Plan Information
Equity Compensation Plan Information The following table sets forth additional information with respect to the Company’s equity compensation plans at December 31, 2025.
Equity Compensation Plan Information
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) | | | (a) | (b) | (c) | | Equity compensation plans approved by security holders | | | | | 2015 Omnibus Stock Incentive Plan | 1,897,812(1) | $14.15(2) | 2,825,119 | | Employee Stock Purchase Plan (3) | — | — | 162,140 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 1,897,812 | $14.15 | 2,987,259 |
Equity Compensation Plan Information
(1)Includes 1,855,729 outstanding RSUs under the 2015 Omnibus Stock Incentive Plan. (2)Does not reflect RSUs because they have no exercise price. (3)Under this plan, eligible employees are able to purchase available shares with post-tax dollars at a 15% discount to fair market value. There were 38,418 shares purchased under the Employee Stock Purchase Plan at a weighted average price of $27.02 during 2025.
Summary Compensation and Other Tables
| Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards (2) | All Other Compensation (3) | Total | | James S. Mahan III Chairman and Chief Executive Officer | 2025 | $512,565 | $— | $— | $452,867 | $965,432 | | | 2024 | 514,529 | — | — | 330,445 | 844,974 | | | 2023 | 510,601 | — | — | 394,892 | 905,493 | | William C. Losch III President | 2025 | $803,077 | $80,000 | $1,559,585 | $334,062 | $2,776,724 | | | 2024 | 798,462 | 57,600 | 12,032,731 | 187,541 | 13,076,334 | | | 2023 | 697,115 | — | 3,149,967 | 128,283 | 3,975,365 | | Walter J. Phifer Chief Financial Officer | 2025 | $373,750 | $50,000 | $812,087 | $47,806 | $1,283,643 | | | 2024 | 345,000 | 20,000 | 394,591 | 48,728 | 808,319 | | | 2023 | 250,000 | — | — | 43,359 | 293,359 | | Renato Derraik Chief Information and Digital Officer, & Interim Information Security Officer, Bank | 2025 | $602,308 | $60,000 | $541,518 | $51,712 | $1,255,538 | | | 2024 | 604,616 | 45,000 | 838,471 | 51,730 | 1,539,817 | | | 2023 | 594,231 | — | 3,149,967 | 48,738 | 3,792,936 | | Mark M. Moroz (4) Chief Banking Officer | 2025 | $446,058 | $47,500 | $1,300,756 | $53,712 | $1,848,026 | | | 2024 | 352,692 | 27,000 | 443,880 | 51,615 | 875,187 | | | 2023 | 350,000 | — | — | 48,680 | 398,680 |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The following discussion presents the potential payments for each of our NEOs upon a termination of employment or change in control. Pursuant to applicable SEC rules, the analysis contained in this discussion does not consider or include payments made to a NEO with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of NEOs of the Company and that are available generally to all salaried employees. The actual amounts that would be paid upon a NEO’s termination of employment can only be determined at the time of such executive officer’s termination. Due to the number of factors that affect the nature and amount of any compensation or benefits provided upon the termination events, any actual amounts paid or distributed may be higher or lower than reported below. Among other factors that could affect these amounts are the timing during the year of any such event and our stock price. The Company’s NEOs serve at the discretion of the Board of Directors, and no NEO is party to an employment agreement. In the event of a NEO’s termination of employment for any reason whatsoever, any severance benefits or other cash payments would be negotiated on an individual basis. Awards Under the 2015 Omnibus Stock Incentive Plan. In the event a NEO voluntarily terminates his or her employment, he or she would forfeit all unvested equity awards. The NEO would have three months from date of termination to exercise any vested stock options. In the event of termination of a NEO’s employment by the Company, with or without Cause (as defined in the 2015 Omnibus Stock Incentive Plan and summarized below), he or she would forfeit all unvested equity awards. The NEO would have three months from date of termination to exercise any vested stock options, unless the officer is terminated for Cause in which case he or she may not exercise any stock options after the date of termination. As defined in the 2015 Omnibus Stock Incentive Plan, “Cause” is generally defined as: •the officer’s performance of any act, or failure to perform any act, in bad faith and to the detriment of the Company or its subsidiaries; •the officer’s dishonesty, intentional misconduct or material breach of any agreement with the Company or its subsidiaries; •the removal of the officer from office or permanent prohibition of the officer from participating in the affairs of the Company or its subsidiaries by regulatory order; •the occurrence of any event that results in the officer being excluded from coverage, or having coverage limited for the officer, under the Company’s blanket bond or other fidelity or insurance policy covering its directors, officers, or employees; or •the officer’s commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person. In the event of termination of a NEO’s employment due to death or Disability (as defined in the 2015 Omnibus Stock Incentive Plan and summarized below), he or she would forfeit all unvested equity awards. The NEO would have twelve months from the date of termination to exercise any vested stock options. As defined in the 2015 Omnibus Stock Incentive Plan, “Disability” generally means a “disability” (or similar word) as defined under the long-term disability policy of the Company or its subsidiaries. If the Company or its subsidiaries do not have a long-term disability plan in place, “Disability” means that an officer is unable to carry out the responsibilities and functions of the position held by the officer by reason of any medically determinable physical or mental impairment for a period of not less than ninety consecutive days. None of the outstanding equity awards for any NEO provides for acceleration or continued vesting of the awards in the event of retirement. Terminations Involving a Change in Control. In the event of a change in control of the Company, defined as a Corporate Transaction in the 2015 Omnibus Stock Incentive Plan and summarized below, unvested time-based RSUs would become fully vested immediately in the event a NEO’s employment is terminated within twelve months following a Corporate Transaction for any reason other than Cause. All unvested stock options would become fully vested immediately in the event a NEO’s employment is terminated within twelve months following a Corporate Transaction for any reason other than Cause, and the NEO would have twelve months from the date of termination to exercise any vested options. As defined in the 2015 Omnibus Stock Incentive Plan, “Corporate Transaction” generally means any of the following transactions: •a merger or consolidation in which the Company is not the surviving entity (except for a transaction the principal purpose of which is to change the state in which the Company is incorporated); •the sale, transfer or other disposition of all or substantially all of the assets of the Company; •the complete liquidation or dissolution of the Company; •any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of the Company’s common stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger; or •acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership of securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities. The table below presents the amounts that would be owed to the NEOs under the 2015 Omnibus Stock Incentive Plan in the event of termination or a change in control. In the case of voluntary or involuntary termination, death, disability, and retirement, the presentation assumes that the NEO’s employment was terminated on December 31, 2025. In the case of a change in control, the presentation assumes that the Corporate Transaction occurred on December 31, 2025 and, in the case of any outstanding, unvested stock options, that the NEO’s employment was terminated on December 31, 2025, for a reason other than cause.
Potential Payments Upon Termination or Change in Control
| Name and Principal Position | Voluntary or Involuntary Termination | Death | Disability | Retirement | Change in Control | | James S. Mahan III Chairman and Chief Executive Officer | $— | $— | $— | $— | $— | | William C. Losch III President | — | — | — | — | 11,593,675(1) | | Walter J. Phifer Chief Financial Officer | — | — | — | — | 1,212,761(1) | | Renato Derraik Chief Information and Digital Officer, & Interim Information Security Officer, Bank | — | — | — | — | 3,937,609(1) | | Mark M. Moroz Chief Banking Officer | — | — | — | — | 2,290,561(1) |
Potential Payments Upon Termination or Change in Control
(1)Amounts shown for Messrs. Losch, Phifer, Derraik, and Moroz include the value of unvested RSUs that would become fully vested upon termination of their respective employment within twelve months following a Corporate Transaction for any reason other than Cause, calculated based on the closing price of our common stock on the last trading day of 2025.
Principal Executive Officer Pay Ratio
Principal Executive Officer Pay Ratio As required by Section 953(b) of the Dodd-Frank Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of Mr. James S. Mahan III, our CEO, as of December 31, 2025. For 2025, our median employee annual total compensation (for all employees other than our CEO) was $162,439. The annual total compensation for our CEO during the same period was $965,432. Based on this information, the ratio of the annual total compensation of our CEO to the median employee was 5.9 to 1. We identified our median employee using our entire workforce (other than our CEO), as of December 31, 2025, of approximately 1,025 full-time and part-time employees. We utilized payroll records for fiscal 2025 wages as reported to the Internal Revenue Service. We did not annualize compensation for employees who were not active for the entire year. No full-time adjustments were made for part-time employees. We identified our median employee using a standard median formula based on the compensation measure, which was consistently applied to all employees included in this calculation. We believe the principal executive officer pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. With respect to the annual total compensation of the median employee, we identified and calculated compensation for 2025 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $162,439. With respect to the annual total compensation for the CEO, we used the amount reported in the “Total” column of our 2025 Summary Compensation Table. Under the SEC’s rules and guidance, companies are allowed to adopt numerous ways to identify the median employee. In addition, other companies have different employee demographics and compensation and benefit practices. As a result, principal executive officer pay ratios reported by other companies may vary significantly and are likely not comparable to our CEO pay ratio.
Pay versus Performance
Pay versus Performance Pay versus Performance Table. The following table provides information for the years 2025, 2024, 2023, 2022, and 2021 with respect to the compensation of our principal executive officer (“PEO”), which is our CEO Mr. Mahan, the average compensation of our other non-PEO NEOs, and the performance measures set forth in the table, including the Company’s selected performance measure of book value per share.
Pay versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1) (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (3) (4) | Total Shareholder Return (5) | Peer Group Total Shareholder Return (5) | Net Income (6) ($ in thousands) | Book Value Per Common Share (7) | | 2025 | $965,432 | $965,432 | $1,790,983 | $1,057,464 | $74 | $131 | $102,823 | $25.06 | | 2024 | 844,974 | 844,974 | 4,127,009 | 3,438,495 | 84 | 127 | 77,474 | 22.12 | | 2023 | 905,493 | 905,493 | 3,707,743 | 2,830,090 | 97 | 116 | 73,898 | 20.23 | | 2022 | 781,195 | 781,195 | 1,207,866 | (4,211,841) | 64 | 121 | 176,208 | 18.41 | | 2021 | 884,380 | 884,380 | 9,833,931 | 16,358,379 | 184 | 133 | 166,995 | 16.39 |
Pay versus Performance
(1)Mr. Mahan served as the PEO for each year indicated. (2)This is the amount of compensation actually paid to the PEO for each year, as set forth within the Summary Compensation Table “Total” column for the applicable year. The Company did not provide any stock or option awards for the PEO within the Summary Compensation Table. Compensation actually paid to the PEO was identical to the total compensation for the PEO reported for each applicable year within the Summary Compensation Table. No adjustments were made. (3)For 2025, our non-PEO NEOs were Messrs. Losch, Phifer, Derraik, and Moroz. For 2024, our non-PEO NEOs were Messrs. Losch, Phifer, Derraik, and Seward. For 2023, our non-PEO NEOs were Messrs. Losch, Derraik, Garriott, former President of the Bank until August 2023, Seward, and Ms. Stephanie Mann, former Chief Strategy Officer until August 2025. For 2022, our non-PEO NEOs were Messrs. Losch, Derraik, Seward and Mr. Smits, former Chief Credit Officer until August 2024. For 2021, our non-PEO NEOs were Messrs. Losch, Derraik, and Garriott, Mr. S. Brett Caines, who served as our Chief Financial Officer until August 31, 2021, and Mr. Underwood, a member of our Board of Directors, who served as President of the Company until November 2023. (4)This is the average compensation actually paid to the non-PEO NEOs for each applicable year, starting with the average of such amounts set forth within the Summary Compensation Table “Total” column for the applicable year. See Average of Non-PEO NEOs table below. (5)The Company TSR and the Company’s Peer Group TSR reflected in these columns is calculated based on a fixed investment of $100 on December 31, 2020, and calculated on the same cumulative basis as is used in Item 201(e) of Regulation S-K. The peer group used to determine the Company’s Peer Group TSR for each applicable fiscal year is the KBW Nasdaq Regional Banking Index, as disclosed in our Annual Report for the year ended December 31, 2025, pursuant to Item 201(e) of Regulation S-K. (6)Represents the amount of net income attributable to common shareholders reflected in the Company’s audited financial statements for the year indicated. (7)We have selected book value per common share as our most important financial measure (that is not otherwise required to be disclosed in the table) used to link compensation actually paid to our NEOs to Company performance for fiscal year 2025. Book value per common share is defined as total common equity (total equity less preferred stock and non-controlling interest) divided by total common shares outstanding. To calculate the average compensation actually paid (“CAP”) to the other NEOs, the following amounts were deducted from and added to total compensation, as depicted in the Summary Compensation Table. No NEOs had any awards that vested in the same year they were granted, except for Mr. Losch who received an award of 250,000 RSUs on February 12, 2024, the first annual vesting of which occurred on August 25, 2024, the first anniversary of his promotion as President of the Bank. No NEOs had any dividends or other earnings paid on awards in the year prior to vesting that are not reflected in total compensation for the applicable year, and therefore, no adjustments for those items were included in calculating CAP.
Pay versus Performance
| Average of Non-PEO NEOs | 2025 | 2024 | 2023 | 2022 | 2021 | | Average Total Compensation Reported in Summary Compensation Table for the Year Indicated | $1,790,983 | $4,127,009 | $3,707,743 | $1,207,866 | $9,833,931 | | Adjustments: | | | | | | | Less, Average Grant Date Fair Value of Stock Awards Reported in the Summary Compensation Table for the Year Indicated | 1,053,487 | 3,452,083 | 2,099,973 | 537,490 | 9,211,030 | | Plus, Average Year-End Fair Value of Awards Granted in the Year Indicated that were Outstanding and Unvested at Year-End of Such Year | 1,112,313 | 2,967,714 | 2,718,316 | 256,473 | 14,577,430 | | Plus, Average Change in Fair Value of Awards Granted in Prior Years that were Outstanding and Unvested at Year-End (From Prior Year-End to Year-End) | (551,993) | (521,137) | 762,907 | (4,082,106) | 261,261 | | Plus, Average Fair Value of Awards Granted and Vested in the Year Indicated | — | 531,500 | — | — | — | | Plus, Average Change in Fair Value of Awards Granted in Prior Years that Vested in the Year Indicated (From Prior Year-End to Vesting Date) | (240,352) | (214,508) | 210,847 | (1,056,584) | 896,787 | | Less, Average Prior Year-End Fair Value of Awards Granted in Prior Years that Forfeited in the Year Indicated | — | — | 2,469,750 | — | — | | Average Total Adjustments | (733,519) | (688,514) | (877,653) | (5,419,707) | 6,524,448 | | Average Compensation Actually Paid | $1,057,464 | $3,438,495 | $2,830,090 | $(4,211,841) | $16,358,379 |
Pay versus Performance
Pay versus Performance Tabular List. As described in the Compensation Discussion & Analysis above, our approach to compensation is designed to recognize both corporate and individual performance, promote long-term stock ownership, attract, retain and motivate talented employees, and balance risk and reward while taking into consideration shareholder feedback as well as market trends and practices. The most important financial measures used by the company to link CAP (as defined by SEC rules) to the Company’s NEOs for the most recently completed fiscal year to the Company’s performance are: •Book Value Per Common Share •Annual TSR •Pre-Provision Net Revenue Pay versus Performance Comparative Disclosure. While we utilize several performance measures to align executive compensation with performance, all of those measures are not presented in the Pay versus Performance table above. Moreover, the Company generally seeks to incentivize long-term performance and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as defined by SEC rules) for a particular year. The graphics below depict the relationship between each financial performance measures in the Pay versus Performance table above and CAP to our CEO and, on average, to our other NEOs, for each the four applicable years.
Director Compensation
Director Compensation Members of the Board of Directors who are not employees of the Company or the Bank receive compensation for their service on the Board. The Compensation Committee annually reviews the total compensation of our non-employee directors and each element of our non-employee director compensation plan (the “Director Compensation Plan”) and makes a recommendation regarding the Director Compensation Plan to the Board. This review typically takes place in May of each year. Board Fees. In May 2025, the Board approved an annual retainer of $60,000 for each non-employee director, $25,000 for the chair of the Audit Committee, $20,000 for the chair of the Risk Committee, $18,000 for the chair of the Compensation Committee, $13,000 for the chair of the Nominating & Corporate Governance Committee, $17,000 for the chair of the Directors Loan Committee, and $12,000 for non-employee directors who are members of the Bank’s Directors Loan Committee. 2015 Omnibus Stock Incentive Plan. Our directors are eligible for awards under our 2015 Omnibus Stock Incentive Plan. The awards may be issued in the form of stock options, restricted stock, RSUs or stock appreciation rights. Ms. Bradford and Messrs. Cameron, Lucht, Petty, and Valine each received an award of 2,946 RSUs on May 20, 2025, valued at $82,635. Mr. McHenry received a pro-rated award of 3,080 RSUs on May 28, 2025, valued at $82,390. Mr. Lunsford received a pro-rated award of 1,890 RSUs on August 12, 2025, valued at $62,616. Information regarding the 2015 Omnibus Stock Incentive Plan can be found under the heading “2015 Omnibus Stock Incentive Plan” above. The following table presents a summary of all compensation received or earned by the Company’s non-employee directors for their service during the year ended December 31, 2025. Directors of the Company who are also employees are not separately compensated for their service on the Board of Directors. No director received any non-equity incentive plan compensation or non-qualified deferred compensation earnings in 2025.
Director Compensation
| Name of Director | Fees Earned or Paid in Cash | Stock Awards (1) | Option Awards (2) | All Other Compensation (3) | Total | | Tonya W. Bradford | $72,000 | $82,635 | $— | $— | $154,635 | | William H. Cameron | 90,000 | 82,635 | — | — | 172,635 | | David G. Lucht | 103,333 | 82,635 | — | — | 185,968 | | Jeffrey W. Lunsford (4) | 23,226 | 62,616 | — | — | 85,842 | | Patrick T. McHenry (5) | 36,613 | 82,390 | — | — | 119,003 | | Miltom E. Petty | 72,000 | 82,635 | — | — | 154,635 | | Neil L. Underwood | — | — | — | 123,639 | 123,639 | | Yousef A. Valine | 97,000 | 82,635 | — | — | 179,635 |
Director Compensation
(1)Ms. Bradford and Messrs. Cameron, Lucht, Petty, and Valine each received an award of 2,946 RSUs with a grant date fair value of $82,635 on May 20, 2025. Mr. McHenry received a pro-rated award of 3,080 RSUs with a grant date fair value of $82,390 on May 28, 2025. Mr. Lunsford received a pro-rated award of 1,890 RSUs with a grant date fair value of $62,616 on August 12, 2025. All awarded RSUs vest on May 1, 2026. There were no other RSUs outstanding for any director as of December 31, 2025. (2)No options were awarded to non-employee directors in 2025. At December 31, 2025, no non-employee directors had options outstanding. (3)All other compensation includes personal use of the Company aircraft. For 2025, amounts for personal use of the Company’s aircraft were calculated using the AIC method and are based on variable costs incurred including fuel, applicable fees, maintenance service, crew travel, and other operating expenses. In February 2025, the Compensation Committee awarded Mr. Underwood up to 50 aircraft hours in lieu of the non-employee director annual retainer and RSU award received by our other non-employee directors. (4)Mr. Lunsford was appointed as a member of our Board of Directors effective August 12, 2025. (5)Mr. McHenry was appointed as a member of our Board of Directors effective May 21, 2025.